In Re Hoopiiaina Trust

2006 UT 53, 144 P.3d 1129, 561 Utah Adv. Rep. 3, 2006 Utah LEXIS 147
Utah Supreme Court·Decided September 19, 2006·No. No. 20050619·Published·Cited by 1 cases

Opinion

On Certiorari to the Utah Court of Appeals

DURHAM, Chief Justice:

¶ 1 This case, which reaches us on certiora-ri in the form of a quiet title action, involves a multi-generational family dispute over the ownership of certain real property that was placed into two irrevocable trusts over thirty years ago. Defendants Cuma S. Hoopiiaina (Cuma), individually and as personal representative of the Estate of Malualani B. Hoo-piiaina (Malu), and Marlin Forsyth1 request that we reverse the Utah Court of Appeals’ decision. The court of appeals held that plaintiffs Michelle Samantha Gatlin Nolan’s (Michelle) — both individually and as trustee for the Malualani B. Hoopiiaina Trusts — and Michael Gatlin’s (Michael) suit should be characterized as a quiet title action and that quiet title actions are not subject to a statute of limitations. We accepted certiorari in order to clarify the legal principles underlying the application of the statute of limitations to claims seeking to quiet title to real property. We affirm the decision of the court of appeals and hold that plaintiffs’ quiet title claims are not subject to a statute of limitations. We also modify the court of appeals’ holding that summary judgment was inappropriate as to plaintiffs remaining claims and hold that the concealment version of the equitable discovery rule tolled the statutes of limitation on these claims as a matter of law.

BACKGROUND

¶ 2 Because this ease reaches us on certio-rari from the court of appeals following the district court’s grant of summary judgment in favor of defendants, we recite the facts in a light most favorable to plaintiffs, the non-moving party below. Wayment v. Clear Channel Broad., Inc., 2005 UT 25, ¶ 3, 116 P.3d 271.

I. FACTUAL BACKGROUND

¶ 3 This case involves an intrafamily dispute between the grandchildren of Malu (plaintiffs Michelle and Michael) and Malu’s widow (plaintiffs’ stepgrandmother Cuma) and her son Marlin Forsyth. The facts underlying this dispute are somewhat complicated and stretch back over thirty years. In 1974, attorney George K. Fadel prepared two similar trust agreements for Malu. These agreements were executed by Malu, as set-tlor of the trusts, on April 10, 1974. They were subsequently recorded in the Salt Lake County Recorder’s Office on April 18, 1974. The first agreement (Trust I) conveyed the title to real property located at 349 West 700 South in Salt Lake City to Trust I. The second agreement (Trust II) conveyed the title to real property located at 345 West 700 [1132]*1132South as well as all personal property used in connection with the iron works business located at that address to Trust II. Both Trust I and Trust II also provided that additional property or assets could be deposited into the trusts after their creation. Importantly, each trust specifically provided that it was irrevocable.2

¶4 Under the terms of Trust I, three trustees were to administer the trust: Malu, his daughter Inez Gatlin (Inez) (the mother of plaintiffs), and LaRayne J. Hartman. Ms. Hartman was also an initial beneficiary of Trust I. Trust I provided that the trustees were to commence paying Ms. Hartman $400.00 per month, to continue for her lifetime, upon the death of Malu or when Ms. Hartman turned sixty-five years old, whichever occurred sooner. The remainder beneficiaries of Trust I were Inez and her children, plaintiffs Michelle and Michael. Trust I provided that upon the death of Ms. Hartman, the trustees were to begin paying the entire income of the trust property to these three beneficiaries annually, an undivided one-third to each. However, when Michelle reached the age of twenty-one, the trust was to terminate and the trust res was to be divided equally among the three.

¶ 5 Trust II also had three trustees: Malu, Inez, and Donald Hartman. The only significant difference between Trust I and Trust II is that the initial beneficiary of Trust II was Mr. Hartman, and the trustees were to pay Mr. Hartman $300 per month rather than $400. The income and res of Trust II were to be distributed amongst Inez and plaintiffs in the same manner as Trust I.

¶ 6 Ms. Hartman died on September 10, 1994. It is undisputed that Mr. Hartman is also deceased, although the record does not disclose when he died. Inez died on April 24, 1996. Thus, plaintiffs eventually became the sole remaining beneficiaries of both Trust I and Trust II. However, the record does not indicate when Michelle turned twenty-one, which under the terms of the trusts should have had the effect of terminating the trusts and triggering the distribution of the res by the trustee. This distribution never occurred.

¶ 7 Malu, the last remaining trustee, died on May 20, 1997. Prior to his death, Malu drafted a holographic will and two codicils; the will was dated March 6, 1996, and the codicils were dated May 23, 1996, and May 15, 1997, respectively. The first codicil contained the following provision: “My daughter Inez Gatlin having died, I remove all provisions for Inez and her children.” The second codicil purported to bequeath the property located at 349 West 700 South in Salt Lake City — the same property held in Trust I — to defendants Cuma and Mr. Forsyth in equal portions.3

¶ 8 A probate proceeding regarding Malu’s estate was initiated on June 6, 1997, and a probate hearing was held on June 25, 1997. Cuma was appointed as the personal representative of the estate, and Malu’s holographic will was found to be his last will and testament. Plaintiff Michelle appeared before the probate court at the June 25 hearing and objected to the will being probated in a manner inconsistent with the trusts.4 After voicing her objection, Michelle spoke off the record with Mr. Fadel, the same attorney who had prepared the trust agreements for Malu in 19745 and who was present at the [1133]*1133hearing as the attorney for Malu’s estate.6 Mr. Fadel represented to Michelle that no trusts even existed, that Malu had disinherited her, and that she had no interest whatsoever in Malu’s estate.7 Following her conversation with Mr. Fadel, Michelle returned to the judge’s chambers and waived her objection.

¶ 9 Shortly after the probate hearing, Michelle contacted attorney Phil Dyer, with whom she discussed both Malu’s will and the possible existence of the trusts. Mr. Dyer advised Michelle that he eould do little to help her unless she had copies of the trust agreements. Because she did not have copies of the trust agreements,8 and because Mr. Fadel had told her that no trusts even existed, Michelle took no further action at that time.

¶ 10 On August 20, 1998, Cuma, as personal representative of Malu’s estate, deeded the real property held in Trust I to herself and Mr. Forsyth and the property held in Trust II to herself. The deeds were recorded that same day at the Salt Lake County Recorder’s Office. Nothing further of note occurred in this dispute until August of 2002.

II. PROCEDURAL BACKGROUND

¶ 11 On or about August 14, 2002, plaintiffs were contacted by a private investigator employed to locate them by plaintiffs’ present counsel, attorney Nolan J. Olsen.9 This investigator informed plaintiffs that they were the beneficiaries of a trust created by Malu and put them in touch with Mr. Olsen.

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In Re Hoopiiaina Trust, 2006 UT 53, 144 P.3d 1129, 561 Utah Adv. Rep. 3, 2006 Utah LEXIS 147 (Utah 2006).

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In Re Hoopiiaina Trust
2006 UT 53 (Utah Supreme Court, 2006)